RALEIGH, N.C. (WNCN) — North Carolina’s Congressional Republicans have made no secret of how much they don’t like the newly signed Inflation Reduction Act.
All eight of the state’s House members from the GOP voted against it, and many issued statements and fired off tweets to express their strenuous disapproval.
THE CLAIMS: Expressing a sentiment, representative of the other members of his party in Congress, Rep. Greg Murphy, a Republican who represents North Carolina’s 3rd Congressional district, said in a statement that the bill “does more to target middle class families than lower inflation as its deceptive name suggests.”
He also pointed to analysis that the bill “would have zero measurable impact on inflation” and said it could “kill as many as 30,000 jobs.”
THE FACTS: The act contains several prongs, from subsidies to fight climate change to an $80 billion investment in the Internal Revenue Service, from a cap on prescription drug costs to a minimum 15 percent tax on corporations that earn at least $1 billion a year in profits.
But Duke economics professor Connel Fullenkamp says what the act doesn’t contain are any quick fixes to inflation — which has reached a 40-year high, though it did ease in July.
“In order for this bill to really reduce inflation, everything that’s in it has to go absolutely right,” Fullenkamp said. “And then the inflation reduction would happen sometime in the future.”
For example: The $375 billion in spending over the next decade to fight climate change.
“If all the green energy subsidies paid off and we have this big improvement in our economy on the supply side for producing green energy and green technology, yes, that would increase the supply side and push downward on prices,” Fullenkamp said. “But that’s going to happen a long time from now.”
He says there is “a legitimate complaint there about the idea that calling this the Inflation Reduction Act is not really, necessarily, very accurate.”
But he pushed back a bit on the part of Murphy’s statement about the middle class being targeted.
Rep. Richard Hudson, who represents the state’s 8th Congressional district, said in a tweet that the act includes “plans to hire 87,000 new IRS agents to come after you. … You couldn’t even fit all the IRS agents in (the) Carolina Panthers’ stadium!”
Hudson was repeating a number brought up by other Republicans in the House and Senate. But there is no mandate in the bill to hire that many “agents.”
IRS officials have said the money is expected to go toward fighting high-end tax evasion, technology improvements and hiring experienced auditors and workers to improve services for taxpayers at an agency that has lost roughly 50,000 workers over the past five years.
“A lot of policymakers are afraid that we’re going to run out of rich people to target for audits and go down the income ladder to target middle-income Americans with more audits,” Fullenkamp said.
“But it’s really up in the air. Nobody really knows how the IRS is going to use that money going forward,” he added. “
A lot of what they might be able to do is actually increase customer service to make their service better, and to answer those kinds of tax questions ahead of time so that people don’t make mistakes on their taxes.”
As for the 30,000 job cuts, that number comes from a report from the Tax Foundation, a right-learning think tank whose model projects a loss of 29,000 full-time equivalent jobs across the country.
That sounds like a big number, until you realize the U.S. labor force includes more than 100 million people.
“It’s never great to lose jobs, but it would have to be some kind of chain of logic like that, which, again, it may happen — if it does, it’s going to happen slowly rather than quickly, and it’s hard to know where those jobs are going to go,” Fullenkamp said. “If it were to happen really quickly, our job market is so robust right now that, presumably, lost jobs like that would be where people would be able to find new work.”